Criticized on AIDS Drug, Maker Will Give It to Some

By GINA KOLATA

Published: October 12, 1989

A pharmaceutical company accused of overcharging for a drug that prevents pneumonia in people infected with the AIDS virus says it will give the drug away to the uninsured but will not reduce the price for others.

Executives of the company, Lyphomed of Rosemont, Ill., said in interviews that thousands of vials of the drug, pentamidine in an aerosol form, worth millions of dollars, would be given to health care providers who would then dispense it to patients who lack insurance.

The company's action could defuse a move by an AIDS advocacy group to bring in the drug more cheaply from abroad. And while the company said it would distribute millions of dollars' worth of the drug, that sum may well be less than the company's cost would be in meeting the foreign competition. Price Has Been Criticized

The company and a Food and Drug Administration spokesman said this is the first time a company has given away approved drugs to needy patients in this country.

The company has been sharply criticized by AIDS patients and their advocates over the price it charges for the drug. A New York organization, the People With AIDS Health Group, has begun filling patients' prescriptions in England, where the drug costs far less.

Derek Hodel, executive director of the group, said he still believes that Lyphomed is charging too much. Mr. Hodel added that since the company has an exclusive license to sell aerosol pentamidine in the United States, ''it goes without saying that if the price is inflated it will remain inflated barring Congressional action.'' #200,000 Need the Drug At least 200,000 Americans with AIDS virus infections need pentamidine to prevent Pneumocystis carinii pneumonia, the leading killer of AIDS patients. Lyphomed and advocates for AIDS patients estimate that thousands must pay for the drug themselves because they have no health insurance or because their insurance does not pay for medications. But no one has a precise estimate of how many people need pentamidine and must pay for it themselves or go without it.

In addition to those lacking health insurance that covers pentamidine, advocates estimate that thousands more pay for the drug themselves because they do not want to disclose to their insurance companies or their employers that they are infected with the AIDS virus. A prescription for aerosol pentamidine is a strong indication of AIDS infection.

Lyphomed's wholesale price is $99.54 a vial and patients are frequently charged $150 to $200 a vial by doctors and pharmacists. Pa-tients must use a vial of pentamidine every month to prevent pneumonia. Patients inahale the drug from a special aerosol dispenser directly into their lungs.

The Burroughs Wellcome Company, which makes AZT, or azidothymidine, the other main drug used by people with AIDS, lowered its price by 20 percent last month in the face of protests by advocates for people with AIDS.

The virus that causes acquired immune deficiency syndrome kills white blood cells of the immune system, making people infected with it vulnerable to organisms that cause pneumonia and other diseases that would ordinarily not even make them sick.

The People With AIDS Health Group of New York announced on Sept. 25 that it would fill patients' prescriptions for pentamidine in England, where the drug is available from a French company, Rhone-Poulenc. In England, the retail price of a vial is $30; the group charges $40 a vial, including customs and handling.

Mr. Hodel said that about 100 patients have sent to England for pentamidine and that new requests come in daily. He said the group's action is legal because the F.D.A. allows AIDS patients to import drugs for their personal use.

Brad Stone, a spokesman for the agency, said it was ''still looking into'' the legality of the import program.

Brian Tambi, a senior vice president at Lyphomed, said, ''This is the first time that a drug company has tried a plan like this.'' The plan would operate like church food pantries for the hungry. ''It would be an honor system,'' Mr. Tambi said. Mr. Stone said he knew of no other program like it. Other companies have sometimes sold their drugs at lower prices to the needy, Mr. Stone said. Dispute on Motive

Cynthia Yost, a marketing director at Lyphomed, said the company is giving the drug away because, it is ''a socially responsible company and is committed to being part of the solution, making this drug available to the patients who need it.''

Mr. Hodel, however, characterized the action as ''a Band-Aid.'' He said that although Lyphomed's program directly helps patients who are indigent, everyone else pays for pentamidine through higher insurance premiums and taxes for Medicaid programs. He added, however, that if Lyphomed delivers the free drug as it has promised, it should put his group's foreign prescription process ''out of business,'' adding, ''And I hope it does.''

Mr. Tambi said the program to give away pentamidine to the needy was not prompted by the People With AIDS Health Group's challenge. He said Lyphomed had begun considering a program to dispense free aerosol pentamidine as soon as the drug received F.D.A. approval in June.

Lyphomed is working with groups of doctors who have large AIDS practices in New York, San Francisco, Los Angles, Houston, Dallas, Chicago and Miami. The groups are filling out questionnaires that ask them how much pentamidine they think they will need. Lyphomed will send supplies of the drug to these groups, and possibly others as well, several times a year, Mr. Tambi said. Series of Price Increases

Lyphomed has been the subject of sharp criticism by AIDS victims and their advocates for a series of pentamidine price increases that occurred as more and more patients needed the drug. Lyphomed charged $25 a vial in 1984 but raised the price to $39.45 in 1985, to $54.79 in 1986, to $69.95 in April of 1987 and finally to $99.54 in August 1987.

''Lyphomed has deeply offended patients, physicians and researchers,'' Martin Delaney of Project Inform, an advocacy group based in San Francisco, said last month.

Mr. Tambi said the price increases were necessary to support research, sales and marketing of the drug. The drug is less expensive in Europe because the European companies did not pay for research, he said.

''We are being pilloried. We are being crucified,'' Mr. Tambi said. He warned that small companies like Lyphomed, whose sales in 1988 were $127.9 million, would stop developing drugs for people with AIDS if their reward is criticism by advocates and undercutting of their prices. Mr. Tambi declined to disclose what it cost to manufacture pentamidine or how much money the company makes on sales of the drug.